The Tax Law of Charitable Giving. Bruce R. Hopkins

196 Id.

      197 197 Jones v. United States, 531 F.2d 1343 (6th Cir. 1976), overruling Jacobs v. United States, 390 F.2d 877 (6th Cir. 1968).

      198 198 Id., 531 F.2d at 1345–1346.

      199 199 Id. at 1346, n. 3.

      200 200 Id. at 1346.

      201 201 Greene v. United States, 806 F. Supp. 1165, 1169 (S.D.N.Y. 1992). This case was affirmed in an opinion containing an extensive discussion of the anticipatory assignment-of-income doctrine as it applies in the charitable giving setting. 13 F.3d 577 (2d Cir. 1994).

      202 202 Hudspeth v. United States, 471 F.2d 275, 279 (8th Cir. 1972).

      203 203 Kinsey v. Commissioner, 477 F.2d 1058 (2d Cir. 1973).

      204 204 Id. at 1063. Likewise, Ferguson v. Commissioner, 108 T.C. 244 (1997), aff'd, 99-1 U.S.T.C. ¶ 50,412 (9th Cir. 1999), in which stock was contributed to charities immediately before the issuer corporation merged following a cash tender offer; the gift was made after the stock changed into a fixed right to receive money, so the donors were taxable on the gain in the stock transferred. This case is discussed in § 4.6, text accompanied by notes 36–37.

      205 205 Rauenhorst v. Commissioner, 119 T.C. 157 (2002).

      206 206 Id. at 167, 168.

      207 207 Rev. Rul. 78-197, 1978-1 C.B. 83. See § 3.7, note 73.

      208 208 Rauenhorst v. Commissioner, 119 T.C. 157, 173 (2002). The court used the occasion of this opinion to note that although the “general principles underlying the assignment of income doctrine are well established,” the “precise contours of the anticipatory assignment of income doctrine in the context of charitable contributions of appreciated property have been the subject of some contention.” Id. at 163, 164.

      209 209 See § 21.4.

      210 210 Dickinson v. Commissioner, T.C. Memo. 2020-128 (2020).

      211 211 Chrem v. Commissioner, 116 T.C.M. (CCH) 347 (2018), denying motions for summary judgment. The court noted a fact that is relevant to the argument that the doctrine is inapplicable in this case: the charity's “fiduciary duties as a custodian of charitable assets.” By tendering its shares, the charity immediately received over $4 million in cash; if the charity, however, did not tender its shares and the acquisition was abandoned, the charity would have been left holding a minority interest in a closely held corporation, the “market value of which might be questionable.”

      212 212 E.g., Priv. Ltr. Rul. 9623035.

      213 213 In almost every charitable gift situation involving money, the contribution is made with after-tax dollars. That is, the funds must first be taken into income before they can be deductible when transferred to charity. Here, however, the IRS concluded that a rebate paid by a retailer participating in the card program is not income to the cardholder. Rather, the rebate reflects a reduction in the purchase price paid for an item purchased with the company's card. This holding is based on Rev. Rul. 76-96, 1976-1 C.B. 23, as modified by Rev. Rul. 2005-28, 2005-1 C.B. 997, stating that rebates paid by an automobile manufacturer to qualifying retail customers who purchase new automobiles are not includible in the gross income of the customers.

      214 214 Priv. Ltr. Rul. 200945022.

      215 215 IRC § 316(a), which defines a dividend as a distribution of property by a corporation to its stockholders out of its earnings and profits.

      216 216 Rev. Rul. 68-296, 1968-1 C.B. 105. Dividends are not deductible by the payor corporation.

      217 217 Crosby Valve & Gage Company v. Commissioner, 380 F.2d 146 (1st Cir. 1967), aff'g, 46 T.C. 641 (1966).

      218 218 See § 2.5(a).

      219 219 As to the latter, see IRC § 512(b)(10).

      220 220 Also Dave Inv. Co. v. Commissioner, 462 F.2d 1373 (9th Cir. 1972).

      221 221 United States v. Knapp Brothers Shoe Manufacturing Corp., 384 F.2d 692 (1st Cir. 1967), cert. den., 390 U.S. 989 (1968).

      222 222 The rules are somewhat different in this regard in such contexts as planned giving (see Part Four) and quid pro quo situations (see § 20.2), but even there the statement is correct as to the deductible portion of the transaction.

      223 223 See § 7.18.

      224 224 Musgrave v. Commissioner, 80 T.C.M. (CCH) 341 (2000).

      225 225 See § 23.1.

      226 226 See § 2.3.

      227 227 See § 2.1(a).

      228 228 Musgrave v. Commissioner, 80 T.C.M (CCH) 341, 344 (2000).

      229 229 Id.

      230 230 Id.

      231 231 See § 21.4.

      232 232 See § 2.4.

      233 233 Reg. § 1.507-2(a)(8).

      234 234 Priv. Ltr. Rul. 200037053. The IRS discussed the charitable gift completion requirements in INFO 2005-0141.

      235 235 IRC § 139(c). This legislation was enacted in 2001, creating an exclusion from gross income for qualified disaster relief payments (IRC § 139(a)).